Question

2019 $ 3,583 X 2020 $ 4,550 - For each method, what is the book value of the machine at the end of 2019? At the end of 2020? (Round your answers to the nearest dollar.) a. Straight-line method 2019 $ 38,800 x 2020 34,600 b. Sum-of-the-years-digits method 2019 $ 35,364 x 2020 $ 28,491 X c. Double-declining-balance method 2019 $ 34,600 X 2020 $ 26,200 X d. Activity method 2019 $ 39,417 X 2020 $ 34,867 3. Next Level The book value of the asset in the early years of the asset's service will be lower under an accelerated method as compared to the straight-line method. The activity method is appropriate when the service life of the asset is affected primarily by the amount the asset is used.

Answer 1

1]	Depreciation expense:
a]	Annual depreciation = (45000-3000)/10 =	$              4,200
	Depreciation:
	2019 = 4200*9/12 =	$              3,150
	2020 =	$              4,200
b]	Sum of the years' digits method:
	2019 = (45000-3000)*(10/55)*(9/12)	$              5,727
	2020 = (45000-3000)*(10/55)*(3/12)+(45000-3000)*(9/55)*(9/12) =	$              7,064
c]	Depreciation rate = (100%/10)*2 = 20%
	2019 = 45000*20%*9/12 =	$              6,750
	2020 = (45000-6750)*20% =	$              7,650
d]	2019 = (45000-3000)*(1/120000)*10000 =	$              3,500
	2020 = (45000-3000)*(1/120000)*13000 =	$             4,550
2]	BOOK VALUE:
a]	2019 = 45000-3150 =	$           41,850
	2020 = 41850-4200 =	$           37,650
b]	2019 = 45000-5727 =	$           39,273
	2020 = 39273-7064 =	$           32,209
c]	2019 = 45000-6750 =	$           38,250
	2020 = 38250-7650 =	$           30,600
d]	2019 = 45000-3500 =	$           41,500
	2020 = 41500-4550 =	$           36,950
3]	Blanks are = lower/activity